(Yicai) Nov. 12 -- China’s forthcoming first energy law is set to have a far-reaching impact on the energy industry, imposing clear requirements for a low-carbon transition, according to a research professor at Peking University.

The law addresses key issues such as ensuring a safe, stable energy supply and promoting a green transition, Yang Lei, deputy dean of the Institute of Energy at Peking University, told Yicai.

Last week, China—the world’s largest energy producer and consumer—passed this groundbreaking energy law, which will take effect on Jan. 1, 2025.

The new regulations are expected to influence energy prices. Compared to the second draft, the final version includes a demand-side management system designed to encourage consumers to adjust their usage based on tiered and peak pricing.

Under the law, the state will prioritize renewable energy sources, supporting the safe, reliable, and orderly replacement of fossil fuels. Specifically, China will accelerate the construction of wind and photovoltaic power plants, giving equal emphasis to both centralized and distributed generation.

The nation is making strides in increasing the supply of renewables. As of June 30, China’s capacity for grid-connected wind and solar power generation reached 1.18 billion kilowatts, surpassing coal power capacity (1.17 billion kW) for the first time and accounting for 38 percent of the nation’s total installed capacity, according to the China Electricity Council.

The regulation aims to reduce the waste of renewable energy by suppliers, a persistent issue. For instance, Huaneng Power International, a power plant operator, recently reported that in the first three quarters, it curtailed 5.2 percent of its wind power, up from 4 percent year-over-year, and 4.2 percent of its solar power, up from 1.6 percent.

The law mandates that energy suppliers and distributors are responsible for utilizing renewable energy, with regulatory oversight to ensure green energy targets are met.

Editor: Emmi Laine